161 F INANC IAL Statements Sect ion 05 Annual Report 2022 NOTES TO THE F INANC I AL STATEMENTS For the year ended 31 December 2022 3. SIGNIFICANT ACCOUNTING POLICIES (contd.) Revenue from contracts with customers and other revenue (contd.) (e) Recognise revenue when (or as) the Group and the Company satisfy a performance obligation. (contd.) The following describes the performance obligation in contracts with customers: (contd.) (j) Engineering services revenue (contd.) The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the rendering of services, the Group considers the effects of variable consideration, if any. Discounts are treated as reduction of revenue for the related transaction, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The Group has enforceable right to payment for performance completed to-date and therefore, the Company recognises revenue over time by measuring its progress towards satisfaction of that performance obligation (stage of completion). Stage of completion is measured using the input method by reference to labour hours incurred to-date as a percentage of total estimated labour hours for each contract. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. All anticipated losses on contracts are fully provided for. (k) Secondment fees Secondment fee represents supervision service by the Group’s professionals who are seconded to customer’s site. The Group recognises revenue at a point in time when secondment services are provided. (l) Professional services The Group performs engineering design and project delivery services. These activities tend to be highly integrated or able to meet the criteria of a series of distinct goods and services. Accordingly, where appropriate will be accounted for as a single performance obligation. The Group has enforceable right to payment for performance completed to-date and therefore, the Group recognises revenue over time by measuring its progress towards satisfaction of that performance obligation (stage of completion). Stage of completion is measured by reference to labour hours incurred to-date as a percentage of total estimated labour hours for each contract. In making the estimates, the Group relies on past experience, the use of engineering tools and the work of specialists, where appropriate. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. All anticipated losses on contracts are fully provided for. Others (m) Finance and interest income Finance income arising from the operating financial asset and interest income are recognised using the effective interest method.
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